NZD/USD dumped to 0.7210 on NZ GDP miss, monetary policy divergence

The selling pressure behind the NZD/USD pair intensifies in the mid-Asian trades, with the rate diving deeper into the red zone to attack 0.72 handle.

NZD/USD dumped amid weak fundamentals

Post-FOMC slide in the Kiwi gained traction after the NZ GDP showed a less-than expected growth in the first quarter, which suggested that the RBNZ could very well leaves door open for further rate cuts going forward.

Poor NZ growth numbers also highlighted the divergent monetary policy outlooks between the Fed and RBNZ, especially after the FOMC hiked rates late-Wednesday and called for one more hike this year alongside balance sheet normalization.

Moreover, the spot also remains under pressure amid moderate risk-aversion, in the wake of the overnight slump in oil prices and weaker Asian equities. Therefore, a rally in the Aussie dollar, in response to strong Aus jobs data, has little impact on its OZ neighbour, NZD.

Looking ahead, a fresh batch of economic releases from the US could offer some fresh trading impetus to the pair.

NZD/USD Levels to consider                                                                              

To the upside, the next resistance is located at 0.7250 (psychological levels) above which it could extend gains to 0.7271 (daily top) and from there to 0.7320 (4-month tops). To the downside immediate support might be located at 0.7198 (10-DMA), and from there to 0.7130 (20-DMA), below 0.7100 (zero figure) would be tested.